The words 'fiscal restraint' were repeated often by U.S. Senator Pat Toomey (R-Pa.) at a town hall meeting held at the Red Fern in Fox Township Friday afternoon.
Toomey, on a tour through Elk and several neighboring counties, held the town hall meeting to address the federal debt, jobs and the economy.
The meeting did not focus as much on the local economy and jobs as it did on federal government spending and fiscal policies, with Toomey answering numerous questions from the audience of about 70 people and emphasizing a fiscal diet for the U.S. government throughout the event.
"Ultimately, we've gotta cut spending," Toomey said.
Toomey is one of the legislators on the bipartisan "supercommittee," which will hold its first meeting Sept. 8. The committee, established as part of the debt ceiling legislation passed this summer, will meet over a three-month period and is charged with coming up with at least $1.2 trillion in deficit cuts by mid-November. A failure to meet the goal will trigger sweeping cuts to Medicare and other federal programs.
Toomey said he has presented his own budget plan that would do exactly that, but Senate Majority Leader Harry Reid (D-Nevada) would not allow it to come to the floor for a vote and that partisan politics is creating an impasse when it comes to enacting a sensible spending plan.
"The budget is the first step in the process of the annual spending bills. You set the total spending and then the annual appropriation bills, or spending bills, follow from the budget," Toomey said. "And in those appropriation bills, a guy like me would have an opportunity to go down to the Senate floor and offer an amendment that would say, for instance, that no funding from this bill may be used by the EPA (Environmental Protection Agency) to impose cap-and-trade, and I'd be happy do that.
"I can't do that because there's no such appropriation bill. This is why it's maddening to me. This is why it's frustrating. We have a very dysfunctional Senate. We're not going through any sensible process that would allow me to to do exactly what you're calling for, which is to provide some check when an agency is running out of control."
Asked about the Glass-Steagall Act, first enacted in 1933 for the purpose of separating investment and commercial banking activities and later repealed in 1999, Toomey emphasized he did not believe the repeal led to the more recent bank bailouts and other financial U.S. woes.
"I strongly disagree with the notion that the repeal of the Glass-Steagall Act is what caused the financial crisis," Toomey said. "I think there's some people that do have that view; I think there's a very compelling body of evidence that suggests to the contrary.
"It seems to me that the real problem at the end of the day is too much leverage and too little capital."
He attributed the financial crisis of the past few years to a variety of which included people securing mortgages for houses that they could not afford "long before we repealed Glass-Steagall."
"I think the fault of the financial crisis is in other areas," Toomey said.
He said other factors were the federal government keeping interest rates too low for too long and helping to create a massive real estate bubble, and Congress requiring that Fannie Mae and Freddie Mac "lend more and more money to people who are less and less able to pay it back."
"I think we had plenty of regulators that were asleep at the switch when these banks got way overly leveraged, but I don't think you can make the argument that because a commercial bank was also allowed to be in investment banking, that that was your problem," Toomey said.
He said the Dodd-Frank Act, enacted in 2010, that implemented more oversight over financial agencies, "makes things worse, not better."
Toomey said he feels overregulation from various federal agencies, especially the U.S. Department of Transportation and the EPA, make it expensive and prohibitive for companies to do business and stifle economic growth. He suggested one way to put the government back on a sure fiscal path would be to "push back on some of the regulatory excesses." As an example, he suggested the EPA should have to provide a report on how many jobs would be affected prior to issuing any new regulation.
He also said current tax policies hamper job creation.
"We impose the second-highest tax rate in the industrial world," Toomey said.
Toomey said he felt current policy is going in the wrong direction.